Bailing Out the Big Guys, Posthaste

In the epilogue to his new book, “Overhaul,” Steven Rattner tallies up the bill for the government assistance that spared General Motors, Chrysler and their financial subsidiaries and automotive suppliers from ruin.

The total, authorized by the Bush and Obama administrations in 2008 and 2009, comes to a staggering $81.8 billion.

While that government assistance has kept the companies alive, “predicting with any accuracy how much of the $82 billion of bailout money will ultimately be recovered is a difficult exercise,” writes Mr. Rattner, a former journalist for The New York Times and a financier who led President Obama’s restructuring effort.

Good, then, that Mr. Rattner subtitled his book “An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry” rather than declare the companies fixed.

The fate of the Detroit carmakers lies not only in government or management hands, but also with consumers, more than half of whom each year buy cars from foreign competitors.

Even so, Mr. Rattner declares in his exhaustive, detail-filled account that the rescue “remains one of the few actions taken by the administration that, at least in my opinion, can be pronounced an unambiguous success.” He adds, “Detroit should count itself lucky.”

The first claim may be up for debate. On the latter score, there can be little disagreement.

In fall 2008 the carmakers were gasping from a dual blow to their most profitable markets of pickup trucks and sport utility vehicles. Skyrocketing gasoline prices caused sales of these big autos to dry up, while the evaporation of easy credit made it almost impossible for those who wanted to purchase them.

Losses mounted, and chief executives inauspiciously boarded private jets to plea first for help from the Treasury secretary at the time, Henry M. Paulson Jr., and subsequently from Congress, getting a frigid response from both.

Within days of his election, Mr. Obama made it clear that he would support the car companies, although he would demand sacrifices from management, labor, investors and others in the vast chain connected to the industry.

Mr. Rattner, a co-founder of the Quadrangle Group, a private-equity firm, entered the scene during the 2008 Thanksgiving holiday. Lawrence H. Summers, Mr. Obama’s chief economic adviser, asked if Mr. Rattner might consider a short-term appointment with the new administration.

The auto rescue was only one of a number of possibilities suggested to Mr. Rattner, who readily admits in “Overhaul” that he had no expertise in the sprawling, complicated industry. (Since readers also may not, he includes helpful tutorials on such arcane subjects as the annual selling rate, the supply network and automotive incentive plans.)

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Credit...Petra Liebetanz

Mr. Rattner eventually was asked to lead a group of 14 Treasury, White House and other staff members, although he fought being dubbed the “auto czar.” Instead, he called the group Team Auto, prompting one of its members, Brian Deese, a young White House assistant, to compare it to the collection of specialists assembled by the actor George Clooney in the movie “Ocean’s Eleven.” If only Mr. Rattner had Mr. Clooney’s determination, let alone his savoir-faire, he might emerge as a more compelling protagonist.

Although he embraced Mr. Obama’s reasons for saving the car companies, such as the millions of jobs they generated and the bearing on the economy if they were to fail, Mr. Rattner writes of his reluctance to formally accept the job, a lack of passion that causes his book to sputter before it can accelerate.

“I was still terrified. While Detroit melted, I dithered,” he writes, forcing Mr. Summers to pin him down on whether he would accept.

Finally on board, Mr. Rattner and Team Auto began leading G.M. and Chrysler toward bankruptcy, a fate both had previously declared unimaginable. (The Ford Motor Company had wisely decided not to pursue assistance rather than risk the derogatory stamp of “Government Motors.”)The bulk of “Overhaul” is taken up by the nuts and bolts of devising an almost unprecedented government-funded restructuring that whisked each company in and out of court protection in weeks rather than the months or years common in other big bankruptcy cases.

In between itemizing brands of soda, seating arrangements and lunch menus, Mr. Rattner discusses the tug of war among the government officials, company executives, financiers and union officials as the prospect of bankruptcy went from remote to reality.

For that, “Overhaul” will certainly be on the bookshelf of every bankruptcy attorney in the country, and become required reading for public policy and law students, even if it fails to capture the public’s imagination in the way that other auto industry comeback stories, such as “Iacocca: An Autobiography,” have done.

Clearly irritated by the intransigence of some of the players, “Overhaul” becomes Mr. Rattner’s chance to settle scores from his intense five months on the job.

He derides Rick Wagoner, G.M.’s chief executive, as aloof and in denial (Mr. Wagoner was fired by the government in March 2009) and chides other G.M. executives for arriving late to meetings, toting enormous PowerPoint presentations. “From Wagoner on down, G.M. seemed to be living in a fantasy” that it was still the greatest carmaker on earth, he writes.

Senator Debbie Stabenow, Democrat of Michigan, is described as a complainer whose initial objection to his appointment, Mr. Rattner says, actually delayed the help her state’s companies sought.

And Mr. Rattner even ladles criticism on the Obama transition team for failing to work more closely with the outgoing Bush administration on a joint program. Had they done so, Mr. Rattner writes, the government might have saved billions of dollars.

All this seems to have left a bitter taste in his mouth toward the industry, although he says he’d take another government job. In fact, as a result of his team’s work, the United States and Canada own two-thirds of G.M., and a smaller chunk of Chrysler, investments that could take years to recover through stock sales.

Mr. Rattner, who unexpectedly left the auto job in July 2009, is now trying to recover his own reputation. In June the Securities and Exchange Commission proposed barring Mr. Rattner from working in the securities industry because of alleged improper dealings involving his investment firm. Mr. Rattner has vigorously fought the charges, and the matter has yet to be resolved.

“Overhaul,” then, must be viewed not only as Mr. Rattner’s effort to tell the story of the auto rescue but also as an opportunity to market himself despite his liabilities. That’s the same kind of marketing Detroit had to do for years.